OrCAD X Resources

When Your Component Is Unavailable: Alternates, Last Buys, and Counterfeits 7 www.cadence.com These criteria will conflict. Engineering's role is to provide accurate demand and availability numbers and to flag which products have qualified alternates. The allocation decision belongs to whoever can weigh revenue, customer relationships, and strategic priorities against each other. 2.3 Phased Allocation and Build Sequencing When available supply covers total demand but not all at once, phased allocation and build sequencing can stretch constrained stock further than a single allocation decision would suggest. If Product A needs 2,000 units in month one and Product B needs 2,000 units in month three, and available supply is 3,500 units with more expected in month two, the supply can cover both programs sequentially even though it cannot cover both simultaneously. Build sequencing that aligns production timing to supply availability can resolve apparent shortfalls that are actually timing mismatches rather than true quantity gaps. The practical tool for this is a simple supply and demand timeline: available supply by month against required demand by month for each product. When supply and demand are overlaid, the real gap often becomes smaller and more specific than the initial shortfall suggests. It also identifies the specific months where stock will be most constrained, which is the infor- mation procurement needs to pursue spot buys or negotiate delivery schedules. Document the rationing decision in writing, including the criteria used, the data it was based on, and who approved it. If a product misses its schedule because it received a lower allocation, the rationale needs to be defensible when that conver- sation happens with the customer or with management. An undocumented rationing decision made under pressure is difficult to defend after the fact. 3. The Last-Time Buy Decision Before committing a quantity, attempt to extend the LTB window. Manufacturers issuing EOL notices are often open to extending the deadline by several weeks when a customer requests it formally through the manufacturer's sales represen- tative. An extension of four to six weeks is frequently available and is worth pursuing before treating the deadline as fixed. An insufficient buy forces a redesign under production pressure. An excess buy carries inventory holding costs of 20 to 30 percent of inventory value per year and risks component degradation if the storage period exceeds shelf life specifications. 3.1 Inputs Required Before the Decision The following inputs are required to make a defensible last-time buy decision. Each should be gathered from the appropriate function before a quantity is committed. Input Source and considerations Projected production volume Product management / sales forecast. Request the range: best case, base case, and worst case. Not just the single-point estimate. The difference between base and worst case determines the inventory risk you are taking. Projected production duration When does the product reach end-of-life? For products with service life requirements (medical, industrial, defense), the relevant window is production life plus the service period during which spare parts may be required. Current on-hand and in-pipeline inventory Procurement / ERP system. Include stock in all warehouses, in transit, and on open purchase orders. Over-ordering because of incomplete inventory visibility is a common and avoidable error. Component shelf life and storage require- ments Manufacturer datasheet and J-STD-033 for moisture-sensitive devices. Semiconductor components generally have long shelf lives when stored correctly. However, some components have defined storage limits, particularly those with moisture sensitivity or electrolytic capacitors. Exceeding these limits can cause assembly yield problems even on apparently good stock. Electrolytic capacitors are an exception and may require reforming after extended storage. Check manufacturer specifications for the specific component.

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